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Public Papers - 1989

Remarks to Members of the American Retail Federation

1989-05-17

Thank you so much for that warm welcome. And let me just say to Don Seibert and Joe O'Neill that I'm delighted to be here. It gives me a chance to express to all of you my appreciation for the support that this organization has given us already and the support that you gave to the previous administration, of which I was very proud to have been a part. I heard John Sununu [Chief of Staff to the President] refer to the minimum wage, and that's what I wanted to talk to you about and solicit your support on today.

We're moving, as you know, toward a very different business climate in this country, and our view of what it takes to compete must change. You know, I think we've heard enough about the shop-worn liberal agenda of more government: mandated government, more broad attempts to run the businesses, and intrusive campaigns to legislate competitiveness. That tired agenda doesn't work. The notion that the Government should control business decisions has never made much sense, and it makes very little sense to me today. So, it is time to move on to the real issue: building a better, more competitive United States -- and not through the intrusion of government but through the energy and the will of the American people. And I still believe that free markets work. I know that there is no such thing as pure free trade in the world today, but we believe in free trade, and obviously in fair trade as well.

What the world has learned over the last 40 years is that government intervention cripples economies, creates barriers for business, kills innovation; and in the final analysis, it costs jobs. And yet, even as the world is beginning now to recognize this truth and you see the changes going on, even in many of the Socialist economies, there are those who are still trying to keep the agenda of government intervention alive and active here at home. And many are well-intentioned, but you know what they say about good intentions. Let me assure you, we are not going down that road.

And we've already made progress in limiting excessive paperwork and regulations, and that work has got to continue -- can't begin to tell you I think it's finished. I'd be thrown out of here by you people that have to wrestle with some of these forms. Drawing on the creative energy of the private sector, I believe we can reach a regulatory balance that is flexible and responsive at the lowest possible cost to business.

And so, thanks to American enterprise and a government that got out of the way, we've created almost 20 million new jobs since the recovery began in 1982. And employment, as you all know, is at record levels. This brings its own challenges. With labor markets getting tighter, opportunities for jobs abound. Many businesses are scrambling for people, with labor shortages driving up wages. Entry-level jobs in some regions of the country with low unemployment start at .00 an hour. And this is a case where the market alone is doing more than the Government could do or should do.

Across America, the skills gap is eclipsing the wage gap, and that's the real problem. And that's a problem where I think the Government does have a role. Caught up in the politics of the minimum wage, it's too easy to forget who it is we're trying to help, and how. The issue is not minimum wage: it's a question of minimum skills. And we're entering a new era of opportunity. Impending labor shortages offer the promise of a job for everyone who is serious about wanting a job -- if they're prepared. My difference with the majority in Congress is not about 30 cents an hour on the minimum-wage legislation: it's about hundreds of thousands of people -- largely young people, largely unskilled people -- who won't have a job to go to if the minimum wage legislation before the Congress now becomes law.

Artificial wage hikes simply mean the entry-level jobs are cut back on. The first to go are the young and the disadvantaged who are just beginning to develop workplace skills. It is haunting how thousands of young Americans in the inner cities believe that they have no stake in our system, no future, no hope. Believing they have nothing to lose, they act as if they have absolutely nothing to gain. And we can't allow this to continue, and it won't if we make sure that more of them can find jobs. I am absolutely, firmly convinced that the best poverty program is a job with dignity in the private sector. And the vast majority of minimum-wage workers are young secondary earners from families with incomes well above the poverty line, if you look at the statistics. And the fact is, fewer than 1 in 10 minimum-wage earners are heads of households and in poverty. They deserve our help, and raising the minimum wage may help some of them. But the cost will be measured in lost jobs, losses that will weigh hardest on the minimum-wage earners who are young and disadvantaged. And most need the experience that those entry-level jobs can provide.

So, I say to Congress: If you want to help the poor, don't take away their jobs. And there are other better strategies to help the working poor that won't cost them their jobs. And I've proposed an effective training wage -- we've had a long battle about that. Minimum-wage differential, it used to be called; now we call it a training wage that would preserve jobs, promote skills development, and give more Americans access to work experience.

We've proposed, also, a new child-care tax credit to enhance the incomes of poorer working families with young children, and enable them to take, or train for, a real job. And I might say that, in the process, we have preserved the concept of parental choice, which I think strengthens the family, as opposed to the legislation on child care being proposed by others up there, which mandates standards from Washington, DC and restricts parental choice.

The jobs we're creating demand higher levels of skills than ever before, so we've set up a package of educational reforms to promote parental choice and encourage excellence and to make our educational system more accountable. We've proposed alternative certification for teachers and principals so that interested, capable people from business or science or engineering and other professions can go ahead and help teach in the public schools. It's a shame when somebody wants to take a sabbatical out of business or elsewhere, is prohibited by almost meaningless regulations that have been promulgated over the year by the education establishment. So, we're trying to move forward in terms of alternative certification, and I would enlist the support of all of you for this worthy goal.

We're proposing significant improvements in the Job Training Partnership Act, already so effective at linking public and private efforts to help those young people that are most at risk get the training that they need for productive lives.

But the best way to make disadvantaged youth and the working poor part of a competitive, opportunity-based economy is to continue to create jobs and prepare people to fill them. And we must limit any increase in the minimum wage so that it won't extract an excessive cost in lost jobs and that it won't increase inflation in the United States. And then we have to have that effective training wage to preserve opportunity for those who need it the most.

And I have a choice to make. I can sign the legislation pending in Congress and go back to the tired agenda of government intervention that so often hurts the very people that it attempts to help, or we can step forward to keep America on the path to a competitive future, a future that is bright with opportunity. And for me, the choice is very clear: If the majority in the Congress rejects my offer of a reasonable compromise -- and we have made such a proposal -- a veto is going to be inevitable. And one thing I will not compromise: I will not compromise the future of the working poor, and that is what's at stake in this legislation before Congress today. And I'm not going to compromise either a generation of young people. They deserve more than the false promises and failed ideas that hurt their chances to have a job. They deserve a job in a growing, noninflationary economy, and I'm going to do my level best to see that everybody has that opportunity.

I thank you, and I refuse to leave here without soliciting your help in sustaining my veto, if that is required. And I would also solicit your help for my parental choice child-care initiative that I think many would find far superior to the legislation that's being created on the Hill that would have the Government mandate to local communities, to churches, to whatever, all the standards. We cannot go that route in this country if we're to preserve the strength of the family and of the community in our social structure. So, I solicit your support for that. And again, looking over my shoulder, I thank you for all the support you've already given us. Thank you all very, very much.

Note: The President spoke at 10:03 a.m. in Room 450 of the Old Executive Office Building. In his opening remarks, he referred to Donald Seibert and Joseph P. O'Neill, chairman of the board and president of the federation, respectively.

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